ASX Small – Mid Caps Conference Small – Mid Caps Conference – October, 2010. ... Red Sand....

AED Oil Limited

AED Oil LimitedDavid DixExecutive Chairman

21 October 2010

ASX Small – Mid Caps Conference Hong Kong

AED Oil Limited

DISCLAIMER

Although appropriate care has been taken in the preparation of this presentation, no representation or warranty is given as to the accuracy or completeness of the information contained herein.

This presentation may contain forward looking statements that are subject to risk factors associated with oil and gas businesses. There is extensive interpretation and speculation in this presentation. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety

of variables and changes in underlying assumptions which could cause actual results or trends to differ materially including, but not limited to, price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.

2ASX Small – Mid caps Conference – October, 2010

AED Oil Limited

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Effective interest: 50%

Operator: AED Oil

Lukut-1 Drilled, hydrocarbons identified

Lempuyang-1 Drilled, hydrocarbons identified

Jerudong, potential re-development

Block L – Brunei


Operator: SMEC (Cooper Energy)

Gigir

East-1 –

drilled

Focus on deeper targets

South Madura PSC – Indonesia

Puffin & Talbot Fields – Australia


Operator: Sinopec

Current processing of new completed 3D seismic

Proven oil reserves: 28MMbbls (P50)


Operator: AED Oil

Gross reserve potential: In excess of 7Tcf (P50) gas-in-place

-

Upside potential well in excess of current estimate

-

Potential for significant oil discovery

2D Seismic

-

Farm-out process continuing

Rombebai PSC – Indonesia

AED OVERVIEWASX Small – Mid Caps Conference – October, 2010 Corporate

Current stock is 201,321,320 ord

. shares

Market cap (15 Oct, 2010) using a trading

price of $0.48 is $96,634,234

9% SGX-listed convertible notes $US

21,217,500. Put date Feb 2011 at $0.61

6% private convertible notes

$US20,000,000. Put date March 2013 at

$0.67

Bank debt: Nil

Cash on Hand: Approx. $50m

AED Oil Limited

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Brunei, Block L•

World Class Oil and Gas province•

AED is the Operator •

Effective Interest -

50%•

Lukut-1 Exploration well -

Complete•

Lempuyang-1 Exploration Well –

Complete, and ready for testing•

Jerudong

–

Re-development potential•

JV partners: Kulczyk

Oil Ventures (40%) and QAF Oilfield Services (10%) Onshore prospect

ASX Small – Mid Caps Conference – October, 2010

AED Oil Limited

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Proven oil and gas province –

Brunei is currently Asia’s third highest producer.

Underexplored –

minimal on-shore exploration activity during the past 20 years.

High drilling success rates –

historical rates in Brunei are very high relative to other regions.

Low drilling costs –

due to largely on-shore acreage location of Block L and ready access to

services and contractors.

Excellent access to existing infrastructure –

means a timely and inexpensive path to

commercialisation for any successful discoveries.

Improved seismic and drilling technologies provide enhanced opportunities

Block L covers approximately 1/3 of Brunei, approximately 2,200km².


WHY BRUNEI?

AED Oil Limited

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Block L Lempuyang-1

Fault Block-1

Fault Block-2

Fault Block-3

Fault Block-4

Fault Block-5

Structure Map

TARGET Top set deltaic packages

TARGET FORMATION

Lower/Upper Belait

Formation

TARGET AGE Middle-Upper Miocene

TRAP Amplitude supported, 3 way fault closure

RESERVOIR Coarsening upwards deltaic sandstones

1. Identified multiple stacked reservoir

sands identifying hydrocarbons

2. Interpreted as part of a larger

complex of 5 fault blocks larger fault

blocks with approx 240 bcf

potential

(P50) and, with possible condensate

3. Future testing programme

to confirm potential discovery

4. Additional well required

to confirm potential of

other fault blocks.

LEMPUYANG PROSPECTASX Small – Mid Caps Conference – October, 2010

Block L

AED Oil Limited

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Red Sand

Orange Sand

Blue Sand

Pink Sand

Green Sand

Faults

Well

FaultBlock 1

FaultBlock 3

FaultBlock 5

FaultBlock 4

FaultBlock 2

Lempuyang-1


LEMPUYANG PROSPECT CROSS SECTION

AED Oil Limited

Depth

8

GRTargetZone

GR Res CNCF/ZDNC Mud Log

Gas Show

Gas Show

Gas Show

Gas Show

Gas Show

Gas Show

Gas Show

GasKick

X80

0X

000

X20

0

Gas Show

GasKick

DRILLING: Actual

Spud date 15 Jul, 2010

Total depth 3220 mMD

(2817mTVD)

Actual Days 88 days*

Drilling design Deviated well (Max inc 42

°)

Cost Approx. US$12.8 million*

Hydrocarbons are interpreted in Blue, Pink and Green

The JV plans to test at least three of these intervals

Significant gas kicks at 2867 mMD

(Total Gas >35%)

Gas and cuttings show throughout the drilled section

from 1430 mMD


LEMPUYANG-1

AED Oil Limited

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Lukut-1

Block L

TARGET Near shore, deltaic packages

TARGET FORMATION Lower/Upper Belait

Formation

TARGET AGE Middle-Upper Miocene

TRAP Up/Down thrown fault block

RESERVOIR Shallow water, coastal plain, lower plain to delta front sandstones


LUKUT PROSPECT

1. Identified multiple reservoir sands with some laminated sands

2. Future testing programme to confirm potential discovery

AED Oil Limited

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DRILLING: Actual

Spud date 2 May, 2010

Total depth 2366 mMD

(2280 mTVD)

Drilling time Approx. 50 days*

Drilling design Deviated well (max inc 24

°)

Dry hole cost Approx. US$9 million*

Proposed Test 2GR ResDepthCaliper Porosity

C1C3C5

Gas Log

Gas Show

Gas Show

Ten intervals of interest defined

The joint venture plans to test up to three intervals

Fluorescence observed at 1687 and 2129 mMD

Gas shows from 1173 mMD

to TD


LUKUT-1

AED Oil Limited

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Near term production opportunity

The Jerudong

Field discovered oil in

1955/56 with Jerudong-2

(the first success

in Brunei Darussalam outside the Seria

field).

Jerudong-6

(1956) discovered gas

Jerudong-9

(1957) -

a twin hole slightly

updip from Jerudong-2, discovered oil and

gas

Between 1956 and 1962, the

field

produced 628,000 bbls

The field was shut-in in 1962 for

political

reasons

Jerudong-11 (1987) -

discovered a 12 m

net gas sand in a very complex part of the

structure

Jerudong-6

Jerudong-9Jerudong-2

Jerudong-3

2D seismic Interpretation


JERUDONG OIL FIELD

AED Oil Limited

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High impact exploration and exciting long term growth potential

Proven oil and gas province –

Brunei is currently Asia’s third highest producer

Multiple play types and numerous leads and prospects

Modern 3D seismic available and addition new seismic

Little recent exploration activity means significant advancements in

exploration are yet to be utilised

High drilling success rates (typically 1 in 3)

Leads and prospects resources of 1.0tcf gas (P50)

Drill two onshore exploration wells, each to a minimum depth of

2,000 metres.


FUTURE EXPLORATION

Phase 2 Exploration Programme

Acquire and process at least:

-

500 kilometres of onshore 2D seismic data

-

500 kilometres of offshore 2D seismic data;

Acquire and process at least:

•

150 square kilometres of offshore 3D seismic data (or dollar equivalent amount of 2D seismic data)

Phase 1 Exploration Programme

Aerial gravity/magnetics

survey

Basin Study

These studies will assist in directing future seismic acquisition and

drilling programmes

AED Oil Limited

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Block L

SouthernDevelopment

Area

CentralDevelopment

Area

NorthernDevelopment

Area

OffshoreDevelopment

Area

Near-term development potential portfolio

First gas planned for 2014

Close to BLNG, BMC and local power station

markets

Low cost drilling and development given

onshore location

Anticipated strong production of >70 mmcf/day

generating significant cash flow

Access to high demand gas markets


CONCEPTUAL DEVELOPMENT AREAS

AED Oil Limited

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Costs - USDDrilling: $10-14m (drilling & complete)

Production of 70m scufs

/day

Processing: $130m (150tj/day)

Pipeline: $60m

Valve & Metering: $20m

Operations: $46m (10 year

production)

Contingency: +-

25%

Total: Approx. $300m

Revenue: $150m per year*

The price is based on 3 scenarios

(BLNG, BMC, local power station)


BLOCK LSouthern Conceptual Development Plan

AED Oil Limited

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Brunei LNG plant

Brunei Methanol Plant

• Small facility (including separator and future compressor) located near Lempuyang-1 well site• Proposed pipeline to Brunei LNG Plant 40 kms•The price is based on 3 scenarios (BLNG, BMC, local power station)

Potential Gas Export Pipeline(40km -

Follows Existing Roads)

BLNG

BMP


GAS MARKET

AED Oil Limited

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Indonesia•

Rombebai

PSC –

AED Interest 100% •

South Madura PSC –

AED Interest 60 %


AED Oil Limited

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Potential world class resource of 7 tcf+ of gas and/or equivalent oil.

Additional potential reservoir level

Large Contract Area of 5,795 sq kms.

Frontier exploration, remote location with exciting potential.

Numerous oil and gas seeps.

2D Seismic Coverage

5 exploration wells drilled in the past. Gas shows in 4 wells. Oil

shows on Gesa-1, 2 wells tested (DST) and flowed gas

3 year license extension currently under negotiation with Indonesian

Authorities

First well on Gesa

structure Kare-1 is planned to be drilled in 2011

Farm out in process to seek a Joint Venture Partner. Subsequent to

license extension

Macquarie Capital Advisors appointed. Data room opened in Jakarta,

a number of major companies through the Data Room

Very good relationship with MIGAS / BPMIGAS


ROMBEBAI PSC

AED Oil Limited

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South Madura Contract Area

Oil Field Gas FieldSouth Madura PSC

A number of near term shallow targets

with low cost drilling and potential for

rapid economic development

Power station on Madura Island

Compliance well, Gigir

East-1

completed in August 2010

2D Seismic

Focus will be on additional deeper

targets with higher resource potential


SOUTH MADURA PSC

AED Oil Limited

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Australia, Puffin & Talbot•

Joint venture between AED (40%) and Sinopec (60%)•

Sinopec is the Operator•

Located in the Timor Sea


AED Oil Limited

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•

Sinopec acquired 60% for $600m in July 2008

•

Reserves: 28 MMbbl

on a P50, 100% basis.

•

Production approximately 2mmbls ceased in May 2009 due to FPSO safety and environmental concerns

•

3D seismic re-processing on AC/L6 completed. Interpretation in progress.

•

Leads and Prospects to be matured in parallel with Screening Development Studies.


PUFFIN – AC/L6 & TALBOT FIELDS

AED Oil LimitedPuff

in Hor

st

Swan

Graben

Woodbine

Graben

Paqualin

GrabenAshmore

Platform

Montara

Terrace

3

Great Auk-1

21ASX Small – Mid Caps Conference – October, 2010

PUFFIN - AC/P22

Location Unrisked OIIP Category

SW Prion AC/P22 215 Lead

NW Prion AC/P22 9 Lead

N Prion AC/P22 11 Lead

NE Prion AC/P22 79 Lead

Prion

Structure AC/P22 ? Lead

TOTAL 489

Undiscovered Resources* –

Prion

Area

Joint Venture –

Sinopec 60%, AED 40%

Great Auk-1 discovered gas/condensate (2009)

Potential southern migration pathway

Increase prospectivity

in Prion

area, big structure

high quality sands

Cartier 3D seismic survey acquired over AC/P22

has been completed and is currently being

processed and data expected in late 2010

Interpretation due in early 2011

* P10 estimates

Prion Structure

AED Oil Limited

• Drilling success and commitment to phase 2 in Brunei, proceeding

to flow test Lempuyang

and Lukut

for 2014 production

•Exciting short term development potential with Jerudong

2012 and medium term potential with Southern Field Development (2014)

•A strong balance sheet

●Puffin and AC/P22 may produce significant opportunities post seismic shoot in a proven province with good sands, reinterpretation. Mature Leads and Prospects in parallel with Screening Development Studies.

●Continue our transformation and positioning of AED to become an important player in South East Asia zone for future but prudent growth and revenue generation.

22ASX Small – Mid Caps Conference – October, 2010

CONCLUDING REMARKS

AED Oil Limited

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Thank You

ASX Small – Mid Caps Conference Small – Mid Caps Conference – October, 2010. ... Red Sand....

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Transcript of ASX Small – Mid Caps Conference Small – Mid Caps Conference – October, 2010. ... Red Sand....